Alabama Policy Institute Submits Report to the Governor’s Special Task Force on Reopening the Economy

Today the Alabama Policy Institute (API) submitted to the Governor’s Special Task Force on Reopening the Economy a report (“Healthy Citizenry, Healthy Economy, Healthy Society”) detailing two important factors related to returning to normalcy after the COVID-19 pandemic. In response to a request from Senate President Pro tempore Del Marsh, a member of the task force’s executive committee, API considered the impact of the shutdown on civil liberties and the Alabama Department of Labor’s response to the economic downturn. Phil Williams, API’s Director of Policy Strategy and General Counsel, who serves on the task force delivered the report today.

“As the leading non-profit, non-partisan authority on good public policy in Alabama, API is honored to have a seat at the table during discussions on how best to move toward a post-pandemic sense of normalcy,” said API President Caleb Crosby. “Decisions to reopen society must be based on facts, data, and be grounded in the protection of personal freedom and liberty; API’s recommendations to the Governor’s Special Task Force do just that.”

First, the report asserts that government control, such as those directives which led to the shutdown of the economy and society, must not become a “new normal,” and the default position should always be from a liberty-first perspective. API asserts, though the governor has “certain limited discretionary powers” to create regulations and suspend laws during a time of declared emergency, a continued use of those powers could lead to litigation over constitutional violations. The report identifies five areas in which constitutional rights may be violated if the current emergency orders remain in place much longer (see page two of the report).Instead of operating from the default position that the government must always act and do so without limit, the goal of opening society must start with the premise that liberty should be protected, and the government must only act when absolutely necessary. “The State of Alabama has responsibilities in controlling the pandemic and in reopening society, but government action must never become more important than the free exercise of constitutionally protected rights and freedoms,” said Williams.

Second, the report addresses the unintended consequences of increased unemployment benefits which include a state benefit of $275 per week and a new federal benefit of $600 per week for up to 39 weeks, an increase from the previous limit of 14 to 20 weeks, set by the State Legislature. Now, a recipient is no longer required to have been terminated, but only must not be working due to the impact of COVID-19. Based on research and conclusions drawn in the report, API recommends the Alabama Department of Labor (ADOL) do more to limit fraud and abuse of the new benefits and should use its regulatory discretion to ensure that the new benefits (an effective hourly rate of $21.87) don’t have an adverse effect of causing individuals to refrain from returning to work, or quitting if they are working, because the benefits are more than normal wages.

“It is not unimaginable that a worker at an essential business such as a grocery store, 1) sees that they can make more money on unemployment, 2) claims that they quit because they felt unsafe at work because of COVID-19, and 3) gains approval and receives three times the income they would have had if they continued working” the report suggests. Such a scenario could also negatively affect businesses which received forgivable loans under the federal CARES Act, as they might have to repay the loan if their payroll decreases due to employees quitting in order to receive unemployment compensation. API’s research also concludes the ADOL’s increase of benefit weeks, which is set by state law, cannot be legally sustained as an increase in weeks must be changed by an act of the State Legislature (see page 14 of the report). In effect, “ADOL is currently ‘encouraging’ applications for benefits” rather than trying to ensure only those who really need unemployment dollars receive them.

“It simply doesn’t make sense for the Alabama Department of Labor to promulgate rules and regulations which encourage unemployment and discourage people from working,” remarked Williams of API and the task force. “People who really need help should get it, no question; but we should not allow an increase in benefits to become a gateway toward long-term dependence on compensation from the government.”

In all, the report includes nine recommendations for actions to be taken by various individuals or entities, including the Governor’s Special Task Force, ADOL, and the State Legislature (see page three of the report). Specifically, among others, the report recommends the task force become a working, “daily living entity … with the sole focus of synthesizing and synchronizing the way forward to reopen” society. The recommendations also call for a special legislative session to enact legislation “that provides protections/indemnity to businesses and local governments who face claims of liability related to the COVID-19 pandemic and the government shutdown” as well as the passage of laws to prevent unemployment fraud and abuse and incentives to encourage business investment.

“We need to take whatever steps are necessary to ensure the government’s response to COVID-19 does not become a new normal by getting on a path toward returning to pre-pandemic normalcy,” concluded API’s Chief Operating Officer Carl Jones. “We have a responsibility to ensure this crisis, and society’s and government’s response to it, does not allow for an increased reliance on the government, the expansion of government powers, or the trampling of any citizen’s liberty and individual rights and responsibilities.”

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